Wed, 27 Apr 2011 15:25:00 +0400
Bank news. Recently an interesting article under an intriguing title “Rothschilds against Arab rulers” has appeared on a web-site islam.ru. Although a number of analytics have perceived it as a continuation of the threadbare theme about the world’s behind the scenes, which is interesting only to the old-timer conspiracy theorists that are likely to perceive almost in anything “the long arm” of secret societies, organizations, families, or clans. The present article has irrevocably been referred to the whole regiment of similar creations from the range of “Rothschilds rule the world”, if it had not been for one “but”. It remarks a truly interesting idea that in critical conditions the western banking system has faced a strong rival, represented by Islamic banking. In order to conquer it, the western banking system has started revolutions in Arabic world. Beyond any doubt, this quite interesting hypothesis needs comments.
What is the point of Islam banking?
As the community experts of Islamic countries of Masterforex-V Academy note, the so-called Islamic banks are still one of the most mysterious phenomena in the world’s financial system:
1. Islamic bank is one of the institutions, created on the basis of Muslim right’s concepts, where the most significant place is occupied by a ban on usury. The usurer himself falls into sin as well as the person who benefits from his services.
2. This means that Islamic banks entirely refuse from collection of interest and futures transactions (they are also under a strong ban on the Koran).
3. The major ban in Islamic banking system is the ban on time games. In other words, it is impossible to pledge future time for the present speculative business.
4. Moreover, Islamic banks adhere to the strongest ban on gambling. They cannot participate in lotteries or any other similar actions.
5. All deposits of the population are interest free.
6. Consequently, a ban on collection of interest from loans (riby) and a refusal from intended risk (garara) is the main difference of Islamic banks from western. Therefore, interest crediting and speculative business at fund and currency markets are not practiced.
Islamic bank is an investor-bank.
• As a matter of fact, the present Islamic bank deals with project investment, sharing every possible risk with its clients. It cannot insure its investments. Jointly with borrowers, Islamic banks suffer losses on the projects, in which the funds have been invested.
• It is for this reason that the bank carefully examines its future client, gets acquainted with its business-plan, allows itself to give advice. The bank is interested in the success of a started business not less than the person who addressed the bank for help.
• Consequently, Islamic bank is oriented on real production, but not speculative business.
• Credits for personal needs and credits for business development, received in Islamic banks, have considerable differences. Both of them are interest free, but in the second case the bank and the businessman sign an agreement, according to which profit as well as loss shall be shared.
• Ordinary investors can also sign an agreement with the bank, entitling it to use their funds as investments (mudaraba) or refusing to give such privilege to the bank. In case of agreement, the investor shall receive his share in profit (from a successful transaction) or, vice versa, shall suffer certain losses. However, the particular feature of such transaction is represented by a total acknowledgement of the investor about the sphere, in which his money is involved. He is certain that these funds have not been involved in activities that are banned by Shariat (the production of alcohol, drugs, prostitution, gambling, pork processing and its trade, etc.).
• Despite all the “ingenuity” in their operation, Islamic banks do not become bankrupts and even obtain considerable profit.
How do Islamic banks earn?
This definitely is a very important question. By refusing from the western system, which is based on usury, Islamic banking initially puts itself in a losing condition in comparison to the former. There arises a question: “By which means can there exist a bank that does not collect interest?”
1. Real property resale by installments. Instead of giving a loan to the client for the purchase of housing, the bank buys it and later sells it to the client by installments, but at a higher price. It is not considered to be a collection of interest, but a certain payment for the risk.
2. Participation in the funding of projects for a certain share in profit. Consequently, Islamic banks, unlike western, are aimed not at receiving maximum profit, but at creation of additional value.
3. Islamic banks also practice such transaction as murabaha. In other words, they deal with purchase and sale. According to an agreement with a client, the bank purchases certain goods for sale. In this case the bank can deal with marketing, transportation, storage, the sale itself.
4. Granting of a special credit "sukuk". The bank receives its percentage not from a granted amount but from the profit of an indebted company.
5. Islamic banks also actively deal with security papers, but are represented more like bidders.
6. Many faithful Muslims pay zakiat – tax on wealth. This is demanded not by the state, but by Shariat. Zakiat is a solely voluntary action intended to help the poor. In such a case, the faithful most frequently bring these funds into Islamic banks.
Is Islamic banking conquering the world?
The first Islamic banks appeared in Middle East slightly earlier than 30 years ago:
• At present they are represented in 75 countries of the world (not only Islamic).
• Their mutual resources amount to more than 300 billion dollars.
• According to some assessments, the quantity of Islamic investments in the world’s economies has reached the amount of 400 billion dollars.
• The volume of transactions in the international Islamic banks system undergoes a yearly growth of 15%.
• Islamic banks confidently enter the world’s financial market, where the establish partnership with the world’s largest banks.
• Deutsche bank, Citibank, HSBC open special Islamic departments. Citibank has opened a specialized section. So-called “Islamic windows” operate in many European and American banks. However, in the last case there exists a considerable risk for a faithful Muslim that his money can be mixed with non-halal (impure) money, which is received from criminal.
• Islamic banks have almost not suffered from the world’s financial crises, having demonstrated the highest effectiveness. • Therefore, the present Islamic banking system is making considerable steps towards integration into the world’s financial system. At the same time, the largest western banks do not show hostility towards it (openly at least) and meet its needs in every possible way. The West is bond to take into consideration the billion of Muslims and their values.
Talks about the efforts of the West to “crash” Islamic banking by means of “Arabic revolutions” are no more than exaggerations. The only example with the first Tunisian Islamic bank “Zituna”, which after the revolution has been engulfed by Tunisian Central Bank that is under the control of the Rothschilds, is not very persuasive. At the same time, Americans were doing their best to save the overloaded with Islamic banks Bahrain from revolution. UAE and Saudi Arabia, where only Islamic banks exist, are predominated by peace and stability. However, in “revolutionary” Egypt and Tunisia only several financial establishments of this kind exist. At present, the same can be related to uneasy Yemen and Siria.
For a more objective assessment of the situation, the staff of the magazine "Market Leader" suggests a questionnaire in trader’s forum: in your opinion, for the western world Islamic banking system is:
• an excellent solution of a difficult situation;
• a real threat;
• just an interesting exotica.
You are free to discuss this article here: forum for traders and investors
Results of the referendum held in the business center of London have been processed.
City men are against Great Britain’s exit from the EU. This is demonstrated by vote in London City, where 75 percent of voters have said a firm “no” to Brexit.
According to The Independent, with reference to the recent survey conducted by the ORB, 55% of the U.K. citizens support the idea of quitting the European Union, which is also known as the so-called Brexit. Apparently, the remaining 45% still want to stay in the European Union. It is interesting to note that 12 months ago, the entire picture was the opposite.
According to several online sources specializing in the U.S. energy sector, the amount of businesses in the U.S. energy sector that went bankrupt in 2015 increased all the way up to 13%. The sources rely on the results of the resent research conducted by Fitch. Back in 2014, the similar figures used to be under 2%. On top of that, the experts are sure that by the end of 2016, the amount of bankruptcies among U.S. energy companies is going to reach 20%.
Some representatives of the international expert community remind us that the Fed is going to go back to discussing the possibility of another interest rate hike in the near future. This discussion is going to take place during the forthcoming FOMC meeting in June. They say that the markets are wrong when expecting the same interest rate for the 4th month in a row.
Not so long ago, a representative of the Saudi King’s was reported to have introduced a new development plan for Saudi Arabia until the year of 2030. It is named Vision 2030. The plan reveals the local authorities’ intention to introduced some fundamental changes to the country’s economy and financial system. They are aware of the serious dependence on crude oil exports, which is why they want to reduce this exposure to the international market of crude oil by making the local economy more diverse and less dependent on the local oil industry, especially amid still low oil prices and great uncertainty dominating today’s financial markets in general and the global oil market in particular.
The members of the Fed’s FOMC left the key interest rate unchanged at 0,25%-0,5% during the latest meeting last week. This is confirmed by the FOMC meeting minutes. To be more specific, the minutes read that the information received since the March meeting clearly indicates that the contemporary labor market is definitely improving and recovering despite the likelihood of another economic slowdown in the USA.
According to Andrey Gudkov, an observer for Deutsche Welle, the oil games played by Saudi Arabia may present danger to Russia and the USA. The be more specific, the observer says that the Saudis are playing dangerous oil games. They have been playing similar games in security and politics. Now they are playing those in macroeconomics. For instance, it was Saudi Arabia who intentionally disrupted the recent oil summit in Doha. On top of that, the Saudis announced their intention to sell tons of U.S. bonds to a stunning amount of $750 billion. Such unexpected steps may undermine financial markets worldwide and eventually affect a number of major and emerging economies, including Russia and the USA.